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The Brazilian National Council of Economic Policy (Confaz) is launching a new version of its program to stop dutyfree paper misuse. The Exempt Paper Operations Registration and Control System (Recopi) is set to start taking effect next September, replacing the previous version, which was suspended last May after the Brazilian Book Chamber (CBL) contested it in court. Sources told PPI Latin America that the new version of the project has been drafted with a special attention to any legal loopholes, in order to prevent another attempt to challenge its constitutional basis. “I’m not sure why CBL contested the earlier version in the fi rst place. The Recopi is not rocket science. Let’s hope this time it works,” a source commented.

By September, any paper company that intends on taking advantage of the tax exemptions in the Brazilian states of Goiás, Bahia, Minas Gerais, Pará, Paraná, Rio de Janeiro, Rio Grande do Sul, Santa Catarina and the Federal District will have to be registered in the program.

The exemption applies exclusively to paper used to print books, magazines and newspapers. “All the companies that work with paper are already part of a federal database. Now, within 24 hours of every transaction, the company will have to declare it on this new program. We believe this will tighten the strap around the frauds committed against the federal government,” said Thiago Oliveira, a partner in the consulting fi rm MPO, which specializes in the matter.

According to estimates of the Brazilian pulp and paper assn (Bracelpa), lastyear 700,000 tonnes of paper declared as duty-free were used for purposesother than editorial or educational. The organization is currently conducting acampaign among companies from the European Union, the USA and Asia,

who export to Brazil, as well as among consumers of paper products, to educate them on the matter and alert them to the risks of participating, directly or indirectly, in an illegal market. In São Paulo state, where the Recopi registration has been active for the last three years, the federal government has already distributed over Real 300 million in fi nes due to irregular paper trades.